Apple, Netflix Earnings – It’s All About Ti-MING

If there’s anything that illustrates what makes Wall Street tick, it’s looking at the stock reaction to the earnings reports from Apple Inc. and Netflix Inc.

It’s just a trading opportunity. It’s just an inning in the game.

Apple earned $13.1 billion in the quarter and Netflix earned $8 million. One stock was up 34%, the other was down 10%. Care to take a guess as to which is which?

The reaction says much more about the Street than it does about either company. The key thing is expectations. Netflix was expected to lose money, and indeed the Street was clearly making a short bet that it would do just that. When it instead posted that slim $8 million profit, the shorts got caught, and the stock rocketed higher.

Apple was expected to make money. But just making money, even near-record amounts of money, isn’t enough for Apple.

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